I understand how The Money Map Method works. How do I actually do it? Is there a suggested allocation to get started?
A: How you actually follow the Money Map Method depends heavily on your personal goals and risk tolerances as an investor. Since it’s not possible for any of us at The Money Map Report to know what those are, it would be inappropriate – not to mention illegal – to provide specific, tailored advice.
That said, the 50-40-10 portfolio works the same with $5,000 or $500 million. Careful study shows that having 50% of one’s assets in the “Base Builders” is optimal. Right now, there are five holdings in the Base Builders section, so that would work out to roughly 10% of your portfolio per holding. So, for example, if you’ve got $50,000 to invest, that would work out to putting $5,000 into each Base Builder.
If you’re just getting started as an investor, I recommend splitting your investments into four equal chunks that are going to be invested over the course of four quarters. That way, you can begin harvesting the strength of the 50-40-10 but also have capital available for new recommendations using a form of “dollar-cost averaging.” It takes a bit more time and effort, but I think that’s merited with the markets as volatile and unpredictable as they are.
If you’re interested in a general overview of position sizing, Dr. Van Tharp has a very good one at this link: http://www.vantharp.com/tharp-concepts/position-sizing.asp